Wall Street analysts are optimistic about Chipotle, suggesting it may be a good buy for investors looking for growth
New York: When it comes to buying or selling stocks, many folks look to analysts for guidance. You know, those experts who work for brokerage firms? Their recommendations can really sway a stock’s price, but how much should we trust them?
Let’s dive into what the big players on Wall Street are saying about Chipotle Mexican Grill (CMG) and whether their advice is worth following.
Currently, Chipotle has an average brokerage recommendation of 1.63, which is pretty close to a “Strong Buy.” This score comes from 32 different brokerage firms, and it shows that most analysts are feeling pretty positive about the stock.
Out of those 32 recommendations, 21 are “Strong Buy” and 2 are just “Buy.” That means a whopping 65.6% of the recommendations are leaning towards a strong buy, which is a good sign for potential investors.
But hold on a second! Just because the analysts are saying “buy” doesn’t mean you should jump in right away. Research shows that these recommendations don’t always lead to the best stock picks.
Why is that? Well, brokerage firms often have their own interests at heart, which can lead to overly optimistic ratings. For every “Strong Sell,” there are usually five “Strong Buy” recommendations. So, their advice might not always align with what retail investors need.
Instead, it might be smarter to use this info to back up your own research. One tool that could help is the Zacks Rank, which rates stocks based on earnings estimate revisions. It’s been shown to be a solid indicator of how a stock might perform in the near future.
Now, the Zacks Rank is different from the average brokerage recommendation. While both use a scale of 1 to 5, the Zacks Rank is based on earnings estimates, which can give you a clearer picture of a stock’s potential.
For Chipotle, the Zacks Consensus Estimate for this year has actually gone up by 0.5% recently, which is a good sign. Analysts are getting more optimistic about the company’s earnings, and that could mean the stock is set to rise.
With all this in mind, Chipotle has a Zacks Rank of #2, which is a “Buy.” So, while the average recommendation suggests buying, it’s always good to do your homework and consider multiple factors before making a decision.
